Scenario 2 - Agency

Pierce Packaging (Pierce) hired Billy Bryant as the Purchasing Manager. Billy was authorized to enter into contracts to purchase materials for Pierce Packaging. On many occasions, Billy contracted to purchase pallets from PalletOne Industries. Because of a downturn in the economy, Pierce Packaging terminated Billy's employment on June 30. On July 9, Luke contacted PalletOne to purchase materials on behalf of Pierce; however, Billy provided a new delivery address, accepted delivery, wrongfully kept the pallets and resold them to a potential new employer at a super low price. PalletOne was not aware that Pierce terminated Billy. On July 15, Pierce provided written notice to PalletOne Industries that Billy had been terminated.

• When was Billy's express authority to act for Pierce effectively terminated?
• Did Billy have authority to enter into the contract with PalletOne on July 9? If so, what type of authority did he have?
• Is Pierce obligated to perform the July 9th contract?
• What should Pierce have done differently?

Explain your answers and support them with relevant scholarly sources and case law.